Question

A firm is evaluating a $100,000 sales opportunity from a new customer. The customer is expected to mirror the firms historica
The purpose of this analysis is: To consider the weighted average of the possible outcomes based on the firms historical coll


Should trade credit be offered? Why? Yes, because NPV is positive No, because there is a 5% chance that the sale will lose a
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Answer #1

Q1:

To consider the weighted average of the possible outcomes based on firms historical collection experience for new customer (--- data that check the probability of customer delaying the payments and its cash impact)

Q2:

Yes, because the net npv after all the posibilies considered is positive

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